CROSS COMPONENT FUNDING by ChrisCaflish

VIEWS: 133 PAGES: 33

									UNITED STATES ARMY FORCES COMMAND




      CROSS - COMPONENT
       FUNDING PRIMER




                       JUNE 1996
                      DEPARTMENT OF THE ARMY
                     HEADQUARTERS, UNITED STATES ARMY FORCES COMMAND
                            FORT MCPHERSON, GEORGIA 30330-6000




                                 JUNE 1996




 The structure and responsibilities of the Active and Reserve
Components have changed dramatically in the past several years.
The Reserve Components have become an even more vital player in
America’s Army. As a result of these changes, a number of
funding issues have surfaced regarding support provided between
Active and Reserve Components. These issues have caused concern
to many of us.

     My staff created this primer as a guide for all who become
involved in these issues. It is a guide in the sense that it
discusses the issues, provides potential solutions to them, and
identifies governing publications. It is an information document
only; it does not provide procedural guidance.

     I consider this to be a notably valuable document and I am
very pleased to be able to provide it for your use. I hope that
it will benefit all who use it.

     The Army Deputy General Counsel (Ethics and Fiscal), the
Office of the Chief, Army Reserve (OCAR), the National Guard
Bureau (NGB), the U.S. Army Reserve Command (USARC), and other
members of the FORSCOM staff provided assistance. I thank them
for their help.

     For questions or comments, please contact Mr. Richard
Shaffer, DSN 367-6250.




                                          1
                      INDEX
                                           PAGE


SECTION I    - CROSS-COMPONENT              3
                 FUNDING (C-C F) ISSUE

SECTION II   - BACKGROUND                   4

SECTION III - DISCUSSION                    5

SECTION IV   - APPROPRIATIONS IN CROSS-      7
                COMPONENT FUNDING AND
                FUNDING FLOW

SECTION V    - REIMBURSABLE GUIDELINES     10
                AND PROCEDURES

SECTION VI   - REPROGRAMMING               12

SECTION VII - APPROPRIATIONS INVOLVED IN   13
               CROSS-COMPONENT FUNDING
               ISSUES

SECTION VIII- EXAMPLES                     15

APPENDIX A   - REFERENCES                  27

APPENDIX B   - DEFINITIONS                 29




I -    CROSS-COMPONENT FUNDING (C-C F) ISSUE



                            2
    EACH COMPONENT FUNDED
    FOR OWN MISSIONS                                                                                   ARNG
                                                     HOWEVER,
                                                                                    USAR
                                                                                                                     USAR
                                                            WHEN                     AC REQUESTS SUPPORT OF OTHERS

                                                                                    ARNG
                                                                            M                          AC
                                                                  F   PROBLE
                                                           NO C-C                                        AC
 NO C-CF PROBLEM:
 •PROVIDER CAN FUND SUPPORT
 •PROVIDER RECEIVES ADDITIONAL




                                                                          RD


                                                                                AR AR
   FUNDS FROM HIGHER HQ




                                                                                AR
                                                                     NG UA



                                                                                  M
 -------------------------------------------------------




                                                                                   US
                                                                                                              SOLUTION




                                                                   AR L G




                                                                                    Y
 C-CF PROBLEM:


                                                                       A




                                                                                      RE
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                                                                    ON
 •PROVIDER CANNOT FUND SUPPORT




                                                                                        SE
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 •ADDITIONAL FUNDS NOT                                            TI




                                                                                            VE
                                                               NA
   AVAILABLE                                                                   AC

                                                                      ACTIVE ARMY
                                                                                                    •PROVIDER REIMBURSED
                                                                                                      FOR O&M
                                                              C-C F P                               •REPROGRAM IN PROGRAM/
                                                                     ROBLE
                                                                          M
                                                                                                     BUDGET CYCLE




THE ISSUE:

Active and Reserve Components (both Army Reserve and Army National
Guard) are funded for those missions for which they have responsibility.
The Cross-Component Funding issue occurs when one component
requests support from another component, and the component providing
the support has not programmed nor budgeted for that support. This
normally occurs during the execution or budget year, when the funding
levels have already been established, and requests for unprogrammed
support cannot normally be provided without additional funding. In these
cases, the requesting component must provide funding for that support
until funding can be realigned to the service supplier in the out-years. Until
this reprogramming can occur, there may be confusion on who is
responsible for providing support and how that support should be paid.
This primer addresses this issue and potential solutions.

II -                             BACKGROUND:


                                                                               3
Over the past few years, many changes have occurred which have
impacted the structure and funding of the Active and Reserve Components.
The Congressional budget cuts, BRAC realignments, force restructuring,
downsizing in both the private and public sectors (including the military
forces), and pressures of changes on the international and domestic
scenes, have led to numerous initiatives to shift support responsibilities
from Active to Reserve Components, and to eliminate duplication between
components on services provided. The Reserve Components have
become a more significant player in providing essential support to
America’s Army. This has resulted in confusion on who is responsible for
providing support and how that support should be paid.

Previously, Active Components and Active Component funded installations
were responsible for providing support to themselves, and limited support
to the Army Reserve and the Army National Guard. The Active Component
installations received Operation and Maintenance, Army (OMA) funding to
provide that support, and most support was common-service
nonreimbursable, meaning that customers were provided support at no
charge to them. It was the Active Component’s responsibility to budget
for, fund, and provide the services.

Although the Army Reserve and the Army National Guard received support
from the Active Component, they still provided and funded much support
for themselves. This has gotten more complicated over the years,
especially with the Tri-Component Funding concept where multiple
appropriations (OMA, OMAR, and OMNG) are now funding one
organization, which was previously funded by one appropriation. This is
different from the Cross-Component Funding concept where the service
supplier is reimbursed by the customer for services provided.




                                  4
III -          DISCUSSION:

As the Active Component structure has declined, the Reserve Components
have picked up more responsibilities, including providing additional
support for themselves. The Cross-Component Funding issue keeps
surfacing because of the changing support responsibilities and lead time
required to reprogram funds from one appropriation to another and to
realign funding to match support responsibilities. Until reprogramming
can be accomplished in out-years, Army Components must reimburse
among themselves, using reimbursable procedures.

                          HOW TO FUND?
              EXEC/BUD YR                              BUD/PROG YR
                    REIMB                                   REPROG



    O&M      REQ                                   REQ
                           PERF                                         PERF
    APPNS
            -----------------------------------------------------------------
                    REIMB \1                             REPROG
    P&A
   (PAY)
   APPNS      REQ          PERF                  REQ                 PERF

 \1 REIMBURSABLE TRANSACTIONS FOR P&A FUNDS CAN ONLY BE INITIATED BY THE
  FUND MANAGERS. FOR EXAMPLE, MILITARY PERSONNEL ARMY (MPA) IS CENTRALLY
  MANAGED BY HQDA (THE ARMY BUDGET OFFICE)(ABO), AND ONLY THEY CAN ISSUE
  A MPA FUNDED MIPR OR CAN ACCEPT A MIPR INTO MPA. OTHER P&A
  APPROPRIATIONS ARE A COMBINATION OF FUNDS THAT ARE CENTRALLY MANAGED
  AND THOSE THAT ARE NOT.


REQ = REQUESTOR (RECEIVER)                      PERF = PERFORMER (SUPPLIER)

All requirements for program years can be funded in the POM process.
The Cross-Component Funding issues occur when during the year of
execution or budget, one component (REQUESTOR/RECEIVER) may ask
for the support of another component (PERFORMER/SUPPLIER), i.e., NG
asks USAR or AC, USAR asks NG or AC, AC asks USAR or NG. There is
insufficient lead time for the supporting component to program or budget
for the support provided. If funds are available, the requesting component
may MIPR funds to the supporting component as illustrated above, and the
issue is resolved. If funds are not available, the support provider cannot


                                            5
be reimbursed. The preceding illustration shows reimbursement between
the O&M appropriations and between the pay appropriations. For some
time it has been the prevailing view that there were Congressional
constraints on the pay and allowance appropriations in regard to the
reimbursement process, and these constraints prevented reimbursement
between the pay appropriations. Per 29 Apr 96 Army Deputy General
Counsel memorandum, such reimbursements are allowed by the
“Economy Act”, 31 USC 1535. The memorandum is referenced in Appendix
A and discussed in Appendix B.

As indicated on the preceding illustration, reimbursement transactions for
P&A funds can only be initiated by the fund managers. MPA is centrally
managed by ABO, and only they can initiate MPA reimbursement
transactions. Other P&A funds are a combination of funds that are
centrally managed and those that are not; therefore, levels of authority to
initiate reimbursement transactions may vary. It is very important to
remember that reimbursement transactions can be made only by those
who have the authority to do so.

If, during the execution year, the requestor of the support does not have
funds available to reimburse the supplier of the support, the available
options are:

     - The component requested to provide the support could agree and
support within current funding levels, or request additional funding from
higher headquarters.

     - If not resolved, the requesting component could submit a request to
DOD to transfer funds from one component to the other within the
Secretary of Defense’s Congressional annually approved total threshold.
The current threshold level is $2.4 billion. It previously excluded Reserve
Component appropriations.




                                   6
IV -    APPROPRIATIONS IN CROSS-COMPONENT
         FUNDING AND FUNDING FLOW

                       APPROPRIATIONS

     ACTIVE COMPONENT                         ARMY RESERVE
   MILITARY PERSONNEL,                  RESERVE PERSONNEL, ARMY
        ARMY (MPA)                               (RPA)
   OPERATION & MAINTERANCE,             OPERATION & MAINTENANCE,
        ARMY (OMA)                         ARMY RESERVE (OMAR)




                         NATIONAL GUARD
                  NATIONAL GUARD PERSONNEL,
                        ARMY (NGPA)
                  OPERATION & MAINTENEANCE, ARMY
                     NATIONAL GUARD (OMNG)




                   OPERATION AND MAINTENANCE
                        FUNDING FLOW
                                 OMA
              OSD               OMAR
                                                CONGRESS
                                OMNG
                OMA
               OMAR
               OMNG              ABO
                                                              OMNG
                                       OMAR

                      OMAR      OCAR                       NGB
        OMA

                        OMNG
                                       OMAR
                                                       OMNG
       FORSCOM                 USARC                       STATES
     OMA                OMA    OMAR           OMAR
     OMAR              OMAR
     OMNG              OMNG
                                               REGIONAL SPT CMD
      CONUSA        INSTALLATIONS                    (RSC)


                                  7
             PAY & ALLOWANCE FUNDING FLOW

                                                                      MPA
                                                                      RPA
                                    CONGRESS                          NGPA
                                    MPA
                                    RPA                   OSD
                                    NGPA

                                      ABO
                  RPA                               NGPA


            OCAR                                          NGB
     RPA     (NOT OPEN ALLOTMENT)
                                               (NOT OPEN ALLOTMENT)     NGPA

       USARC                RPA
                                                               STATES
                                RSC



FUNDING FLOW:

The Active Component has the Operation and Maintenance, Army (OMA)
and the Military Personnel, Army (MPA) appropriations. The Army Budget
Office (ABO) centrally manages the MPA appropriation at headquarters,
and distributes OMA funds to major commands (i.e., FORSCOM) via Fund
Authorization Documents (FADs), which are further issued to installations
via FADs. The Army Reserve component has the Operation and
Maintenance, Army Reserve (OMAR) and Reserve Personnel, Army (RPA)
appropriations. The Office of the Chief, Army Reserve (OCAR) distributes
OMAR and RPA to major commands and to the Army Reserve Command
(USARC) via the FAD process. The USARC issues OMAR to installations
and OMAR/RPA to Reserve Support Commands via FADs. The Army
National Guard has the Operation and Maintenance, Army National Guard
(OMNG) and National Guard Personnel, Army (NGPA) appropriations. The
National Guard Bureau distributes OMNG funds to the States and Major
Commands (MACOMS), and distributes NGPA funds to the States. See



                                           8
charts above. For further information on uses of each appropriation, see
DFAS-IN Manual 37-100-XX.




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                                     9
V - REIMBURSABLE GUIDELINES AND PROCEDURES:

Generally, Army installation host/service suppliers shall fund all O&M
support services required to support the host’s/supplier’s mission, and all
customers (on post and off post) will be provided service at no cost.
Examples are guards on the front gate of an installation and firemen for fire
protection. Installation suppliers will require O&M reimbursement for all
levels of support that are customer/tenant unique such as additional
security guards required in a hospital. The reimbursement will be the
amount of increased cost to the installation to provide the unique service.
Installations may reduce the level of O&M common support services
performed because of funding reductions in their base support budget.
However, any O&M adjustment in levels of services must be consistent and
equitable to all customers, including tenants and off-post customers.
Additional guidance is available in HQDA memorandum, subject: Army
Reimbursable Policy, 19 May 95 and DOD Instruction 4000.19, Inter-service
& Intra-governmental Support, 9 Aug 95.

REIMBURSABLE PROCEDURES:

Reimbursable procedures will be used to reimburse service suppliers for
services rendered. For example, a Military Interdepartmental Purchase
Request (MIPR) is used to request O&M reimbursable services and to
obligate the customers’ O&M funds. The service supplier uses the MIPR as
authority to perform the services and to increase O&M funds available
based on the acceptance of the customers’ order. The customers are
billed at least quarterly for the O&M support provided. Additional guidance
is available in DFAS-IN Regulation 37-1.
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                                       10
               REIMBURSEMENT PROCEDURES
                     MIPR PROCESS

             REQUESTER                 PERFORMER
     Direct Funds                Reimbursable Funds
    MIPR Prepared & Sent           MIPR Accepted
                                  Provide Support     Reimbursement
                                   Reimb Funds - - - - Order
    Obligate                                              Order
                                   Obligate

    Accrue                         Accrue- - - - - - - - -     Earning
                                                             Earning

                                   Disburse
                                                               Collection
    Disburse/                                                Collect
    Reconcile                     1080 Billing


REIMBURSEMENT CRITERIA:

1. There must be an agreement between the requestor/receiver of support
and the performer/supplier. Both must agree on the support to be provided
and the dollar amount to be reimbursed.

2. The support must be a bona fide need of the current fiscal year.

3. Funds are provided by the receiver as reimbursable or direct fund
cite via a MIPR, letter or message to the support supplier. Support
supplier decides the method of financing and how the order will be
accepted.

4. Funds cannot be provided to supplement another appropriation.

5. Funds cannot be used on items for which the funds were not
appropriated or authorized.

6. Funds cannot be used to continue the availability of an
appropriation beyond the normal statutory limits.
VI -     REPROGRAMMING:

                                  11
Reprogramming between appropriations in the year of execution requires
specific notification of Congress. Under normal circumstances,
appropriation reprogramming requests are submitted as part of the budget
submission to higher headquarters. If approved, funds are reprogrammed
during the PPBES cycle, and funds are moved to the appropriation
required to fund the component responsible for providing the support.
Lead time for reprogramming actions is 2-3 years. However, you cannot
reprogram funds unless they are used for higher priority items than were
originally appropriated, due to unforeseen circumstances, and in no case
can they be used to provide support that has been previously denied by
Congress. Additional guidance can be found in the Office of the Assistant
Secretary of the Army (Financial Management & Comptroller)
Reprograming Directive.

As previously stated, the “Economy Act,” 31 USC 1535, allows
reimbursements between the appropriations discussed herein. There are
also other special circumstances, specifically identified by Congress,
whereby the NGPA and RPA appropriations can be reimbursed. They are
as follows:

MPA can be reimbursed by the Defense Business Operations Fund (DBOF)
for costs of military personnel working in the DBOF activity.

For NGPA, a Funded Reimbursement Authority (FRA) program is available
whereby NGPA can be reimbursed by another appropriation if approved.
This FRA must be negotiated with the Office of the Chief, National Guard
Bureau (OCNGB), an MOA completed, and the FRA approved by OSD.

NGPA and RPA may also be reimbursed by Operation and Maintenance
Appropriations for Army Reserve and National guard members who
provide intelligence support to Unified Commands, Defense Agencies and
Joint Intelligence Activities.

For RPA, an FRA program is available whereby RPA can be reimbursed by
another appropriation, if approved. This FRA must be negotiated with the
Office of the Chief, Army Reserve (OCAR), a Memorandum of Agreement
(MOA) completed, and the FRA issued on the funding document.


                                 12
VII - APPROPRIATIONS INVOLVED IN CROSS-
      COMPONENT FUNDING ISSUES:

O&M Appropriations

OPERATION AND MAINTENANCE, ARMY (OMA - 21*2020 Appropriation).
Funds Active Component missions and operation of Active Component
installations. Funds civilian pay, travel, transportation, contracts, training,
purchase of supplies and equipment, and other mission-related items. See
DFAS-IN Manual 37-100-XX for further details.

OPERATION AND MAINTENANCE, ARMY RESERVE (OMAR - 21*2080
Appropriation). Funds Army Reserve missions and operation of Army
Reserve installations, Army Reserve centers, Regional Training Sites, Area
Maintenance Support Activities, equipment concentration sites, and
aviation support facilities. Funds civilian pay (including military
technicians), travel, transportation, contracts, training, purchase of
supplies and equipment, and other mission-related items. See DFAS-IN
Manual 37-100-XX for further details.

OPERATION AND MAINTENANCE, ARMY NATIONAL GUARD
(OMNG- 21*2065 Appropriation). Funds Army National Guard missions and
operation of National Guard camps and training sites. Funds civilian pay
(including civilian technicians), travel, transportation, contracts, training,
purchase of supplies and equipment, and other mission-related items. See
DFAS-IN Manual 37-100-XX for further details.




                                    13
APPROPRIATIONS INVOLVED IN CROSS-COMPONENT FUNDING
ISSUES: (Continued)

Pay Appropriations

MILITARY PERSONNEL, ARMY. (MPA - 21*2010 Appropriation). Funds pay
and allowances of Active Component personnel. Includes PCS moves and
other mission-related costs. See DFAS-IN Manual 37-100-XX for further
details.

RESERVE PERSONNEL, ARMY (RPA - 21*2070 Appropriation). Funds pay
and allowances of Army Reserve Component personnel. Includes clothing,
subsistence, and other mission-related costs. See DFAS-IN Manual 37-100-
XX for further details.

NATIONAL GUARD PERSONNEL, ARMY (NGPA - 21*2060 Appropriation).
Funds pay and allowances of Army National Guard personnel. Includes
training and other mission-related costs. See DFAS-IN Manual 37-100-XX
for further details.
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VIII -    EXAMPLES:

                                        14
1. SUBJECT: Total Army School System (TASS).

    a. TASS is the Army’s vision of fully accredited and integrated
AC/USAR/ARNG schools that provide standardized individual training and
education for America’s Army.

      b. Prior to TASS, CONUS Armies controlled the USAR schools
through the U.S. Army Reserve Commands (ARCOM). The USAR schools
had in excess of 13,000 paid drill spaces to provide adequate numbers of
school staff and instructors to conduct needed training; however, they had
no documented equipment with which to conduct training. The NG had
available equipment for training, but generally did not have the assigned
instructors. Consequently, the USAR would borrow equipment from the
NG and the NG would borrow instructors from the USAR. The support was
usually provided from one component to another without cost.

      c. The downsizing of the Army has seen a major reduction in TDA
personnel in both the USAR and ARNG. The reductions in USAR school
TDAs have severely curtailed USAR capacity to provide instructor support
to the ARNG. At the same time, reduced funding has effectively ended the
capacity of one component to provide personnel or equipment support to
the other without reimbursement.

FUNDING ISSUES/RESOLUTIONS:

     a. Historically, the NG and USAR provided instructors, facilities and
equipment at no charge in most situations. The new requirements under
TASS surfaced the USAR and NG problems of not having sufficient
resource levels (current or future) to accomplish the TASS mission.

     b. Current FY 96 funding levels are not sufficient to support new
missions unless reimbursement is provided for the additional support now
required. Funding issues can be resolved through receipt of funding from
ABO, NGB or OCAR to the respective supplier, or reimbursement between
the applicable appropriations.




                                  15
    c. Out-year funding issues (FY 98 and beyond) can be resolved in
budget and POM development cycles.

      d. Shortfalls in the P&A appropriations (MPA/RPA/NGPA) can be
resolved through reimbursements between the P&A appropriations. O&M
shortfalls can be resolved through reimbursements between the O&M
appropriations (OMA, OMAR, OMNG). As stated previously, reimbursement
transactions for P&A funds can only be initiated by the fund managers.
MPA is centrally managed by ABO, and only they can initiate MPA
reimbursement transactions. Other P&A funds are a combination of funds
that are centrally managed and those that are not; therefore, levels of
authority to initiate reimbursement transactions may vary. It is very
important to remember that reimbursement transactions can be made only
by those who have the authority to do so.

     e. Current FY 96 TASS Pay and Allowance appropriation shortfalls
can be resolved by the component receiving additional funds from ABO,
OCAR or NGB, or by a request to the Secretary of Defense to transfer an
amount from one to the other within the Secretary of Defense’s
Congressionally approved total threshold level of $2.4 Billion.

     f. For RPA, Funded Reimbursement Authority (FRA) is available as an
option. If USAR personnel support requested cannot be resourced due to
RPA shortfall, a FRA can be negotiated between receiver and OCAR. If
approved, then RPA can be reimbursed for support requested.

     g. Use of FRA is also possible for NGPA. If ARNG personnel
support requested cannot be resourced due to NGPA shortfall, a FRA
can be negotiated between the receiver and OCNGB. If approved by
OSD, then NGPA can be reimbursed for support requested.

UNRESOLVED: No unresolved issues.




2. SUBJECT: Shop Smart

                                 16
       a. Shop Smart is a Reserve Component Coordination Council
initiative which transfers Active Army installation base support dollars to
Reserve Component customers and permits them to select support
suppliers of their choice, rather than being constrained to only a
designated installation.

     b. Shop Smart was approved by the Vice Chief of Staff, Army, for
implementation in FY 97, and earlier implementation was encouraged.

    c. The FORSCOM Chief of Staff approved implementation for the
second half of FY 96 at the 65th ARCOM and three Regional Support
Commands (RSC) - the 94th, 96th and 124th.

      d. The Army National Guard has developed a Unit Cost Analysis
System (UCAS), (a national level cost data base), and a Provider and
Customer Cost Estimator (PACCE), which is a PC-based computer model
that extracts costs from the UCAS and generates automated Inter-Service
Support Agreements (ISAs), to assist the 54 States, Territories, and the
District of Columbia to serve as “Fort States” in their role of being
suppliers and receivers of services.

FUNDING ISSUES/RESOLUTIONS:

     a. Implementation procedures are being finalized, and meetings at
the FY 96 sites were held in Feb 96. Funding will be provided to the
USARC on 1 Apr 96 for the four initial sites.

      b. For test areas, FY 96 funding will be withdrawn from FORSCOM
and issued to the USARC. The USARC will, in turn, fund the participating
ARCOM and RSCs. Based on Inter-Service Support Agreements (ISSA)
negotiated between the suppliers and the USARC participants, MIPRs will
be issued to the DOD service suppliers for the Shop Smart functions. Any
other support required from outside DOD will be funded with credit cards,
fund cites, contracts, etc.

     c. Army-wide implementation begins in FY 97 for off-post Army
Reserve customers. Funding will be transferred in the PPBES process to
the USARC, who will issue funding documents to each RSC. The RSC will

                                   17
determine the best supplier of the support and negotiate an ISSA with DOD
suppliers. Reimbursement for any services obtained from DOD will be
provided on a MIPR. Any other support required will be funded with credit
cards, fund cites, contracts, etc.

UNRESOLVED: No unresolved issues.




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3. SUBJECT: Off-Post Area Support (OPAS)


                                    18
     a. The OPAS concept is an Installation XXI initiative in which the U.S.
Army Reserve Command (USARC) was tasked to develop a concept plan to
transfer off-post area support responsibilities to the USAR by leveraging
Reserve Component capabilities to perform certain functions.

      b. The concept plan was staffed within the FORSCOM headquarters
and the initial 32 functions for consideration were reduced to 23. The 23
remaining functions for transfer are Engineering support (19 functions),
credit card support for small purchases, Direct Support (DS) maintenance,
supply, and physical security.

FUNDING ISSUES/RESOLUTIONS:

     a. The USARC concept plan identified staffing levels based upon
manpower standards/requirements and funding levels based upon costing
standards. FORSCOM installation funding and staffing levels are based
upon affordability, not standards.

      b. A significant amount of the support provided involves TRADOC
installations which have not yet been included in the resource requirement
determination.

      c. Installation input into the determination of candidate support areas
and associated resources has been requested and is scheduled to be
submitted to HQ FORSCOM no later than 15 Mar 96. This action will
identify those areas and resources which the installations consider a
prudent business decision to transfer to the USARC. Installation
participation in the process should ensure command-wide support and
transfers will be accomplished only where mutually beneficial.

      d. Upon identification of appropriate support categories and
resources, funding and staffing would be withdrawn from the installations
and provided to the USARC. Concurrently, the off-post support mission(s)
would transfer to the USARC. Appropriate documentation would be made
to transfer OMA funding to the OMAR appropriation through the PPBES
process.




                                   19
UNRESOLVED: Awaiting installation input to determine issues for
resolution, if any.




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4. SUBJECT: Chairman, Joint Chiefs of Staff (JCS) Exercises.


                                    20
     a. The CJCS Exercise Program, approved by the CJCS, consists of
exercises and training activities planned and scheduled annually for a
5-year period. The use of the acronym “CJCS” is the formal term used in
regulations and other publications for this program; however, the acronym
“JCS” is the term that is commonly used. Therefore, “JCS” is the term that
will be used in the remainder of this document.

    b. The prescribing Army regulation for JCS Exercises is AR 350-28,
Army Exercises. FORSCOM Regulation 350-5, Joint Training Exercises,
also provides policy and guidance for FORSCOM units’ participation in
JCS and other exercises.

FUNDING ISSUES/RESOLUTIONS:

    a. FORSCOM appoints a FORSCOM action agent and an executive
agent (a FORSCOM installation, organization or activity) for each exercise
in which it participates.

    b. OMA funds for JCS Exercises are received by FORSCOM from ABO
on a FAD. FORSCOM sends the executive agent funding via FAD. The
executive agent, in turn, sends OMA funding to exercise participants
(Army, USAR, and Army National Guard) using a Military Interdepartmental
Purchase Request (MIPR). These funds pay for incremental costs
associated with the exercise.

     c. The JCS provides Port Handling/Inland Transportation (PH/IT)
funding through ABO to FORSCOM. The PH funds pay for commercial
expenses to receive and dispatch cargo at points of embarkation and ports
of debarkation associated with Military Sealift Command (MSC) shipping
for JCS Exercises. The IT funds pay for moving exercise participants (does
not fund the use of commercial air) and cargo by commercial-for-hire firms
when organic transportation is not available or cost-effective.

     d. For Active Component units, some costs are charged to their own
OMA funds in addition to those charged to JCS Exercise OMA funds. For
Reserve Component units, costs can also be incurred that are chargeable
to the OMAR, RPA, OMNG, and NGPA appropriations.


                                  21
    e. In general, OMA JCS funds are used to pay for incremental costs
resulting from Army Component participation in JCS Exercises. They fund
incremental expenses incurred in connection with the planning, conduct,
and evaluation of JCS Exercises over and above normal operating costs of
the units involved. For Active Component units, the basic factors affecting
the decision as to who provides funding are based on whether or not the
costs incurred are incremental costs (costs resulting from participation in
the exercise). JCS Exercise funds are used to reimburse basically the
same incremental costs of participating Reserve Component units.
Accordingly, for Reserve Component units these same factors still apply;
however, there are additional rules, as discussed in paragraph 4g below.

   f. Detailed guidance concerning costs funded and not funded with
JCS funds is provided in AR 350-28.

    g. The policies provided above apply to the Army components in
general; however, there are additional rules that apply to the Reserve
Components. The additional rules are as follows:

        (1) If the unit is in Annual Training (AT) status, Reserve
Component funds pay part of the cost. The Regional Support Commands
(RSC) fund normal AT Costs (14 days) of pay and allowances (RPA) and
travel. The amount paid equals the amount required to move the unit to
and from its AT site. If the unit is not a normal AT site, the amount paid
equals the cost of moving the unit to and from its mobilization station. The
JCS PH/IT funds pay the remaining cost of moving the unit to and from the
exercise area port of embarkation (POE), aerial port of embarkation
(APOE), point of debarkation (POD), and aerial port of departure (APOD).

       (2) If the unit is in an other than AT status, JCS transportation
funds and PH/IT funds pay all costs of moving the personnel and
equipment.

        (3) If JCS funds are not available, Reserve Component funds (if
available) will pay for all the costs.

       (4) Reserve Component units participating in a JCS Exercise must
be JCS troop-listed in order for JCS funds to be used. In some instances
Reserve Component units participate in exercises even though they are not

                                   22
troop-listed. The OMAR/OMNG funds pay for in-country support costs for
non-JCS troop-listed USAR/ARNG personnel. The JCS funds normally pay
for in-country support costs for JCS troop-listed personnel.

        (5) When Reserve Components are conducting Overseas
Deployment Training (ODT), the National Guard and USAR fund all non-pay
and allowance in-country costs directly related to ODT from their
respective O&M Appropriations. The NGB provides the OMNG funding
through direct allocation to the OCONUS command, to pay for the in-
country support costs. The OCAR provides the funding for OMAR in-
country support costs directly to the Army Component for the supported
unified specified command.

    h. On the next page is a chart that shows how JCS and RC funds are
used or not used when ODT exercises are conducted in conjunction with
JCS and non-JCS Exercises. More information concerning ODT is
provided in the following section on Reserve Component ODT.

UNRESOLVED: No unresolved issues.
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           FUNDING RC ODT EXERCISES                            RC (USAR/ARNG) FUNDS
            (JCS/NON-JCS EXERCISES)                                (RPA/NGPA):

                                                             • TRANSPORTATION (PERS ONLY)
                                                               -- HOME STATION TO APOE
       IS                                                      -- APOE TO HOME STATION
                                                IS
     UNIT        YES    IS IT       YES                YES
                                               UNIT
    TROOP               A JCS
                                              IN AT          • PAY & ALLOWANCES
    LISTED?            EXERCISE?
                                             STATUS?




                                                              JCS FUNDS (OMA & PH/IT):
  NO                         NO
                                                             • TRANSPORTATION (PERS
                                                                & EQUIP)
                                                                -- HOME STATION TO
             RC (USAR/                                             APOE
           ARNG) FUNDS                                          -- APOE TO EXERCISE
            (RPA/NGPA):
                                                             • INCREMENTAL COSTS
          • TRANSPORTA-                                         EXAMPLES ARE:
                                           NO                    -- PRE-DEPLOYMENT
              TION
             (PERS ONLY)                                             SITE SURVEYS (PDSS)
                                                                 -- EQUIP REFURBISH-
          • PAY AND                                                  MENT COSTS
             ALLOWANCES                                          -- NON-TOE EQUIPMENT
                                                                     NEEDS

                                                             • PLANNING CONFERENCE
                                                                PER DIEM



                                                               JCS FUNDS (OMA & PH/IT):
                                  (AND)
                RC (USAR/                                    • TRANSPORTATION
              ARNG) FUNDS                                        (PERS & EQUIP)
               (OMAR/                                          -- HOME STATION TO
               OMARNG): \1                                         EXERCISE
                                                               -- EXERCISE TO HOME
           • EQUIP TRANS-                 (AND)                    STATION
              PORTATION
                                                             • IN-COUNTRY SUPPORT COSTS
           • IN-COUNTRY
  (AND)       SUPPORT
              COSTS


           \1 NGB/USAR
              PROVIDE $$                                      RC (USAR/ARNG) FUNDS
              TO HOST                                              (RPA/NGPA):
              TO PAY
              COSTS                                          • PAY & ALLOWANCES




Note: Although not shown on the above diagram, if the purpose of the ODT is primarily for the support
of the Active Component or to accomplish Active Component missions, then OMA funds the subsistence,
transportation to and from OCONUS duty locations, and in-country costs. This is discussed in
paragraph c on the following page.




                                                  24
5. SUBJECT: Overseas Deployment Training (ODT) of Reserve Component
Units.

    a. Reserve Component ODT is the training of Reserve Component
units with commands, host nation, CONUS based Corps and Third U.S.
Army, and such training is Outside the Continental United States
(OCONUS), and U.S. territories and possessions.

    b. The ODT includes training performed in conjunction with JCS
Exercises. The prescribing Army regulation for ODT Exercises is AR 350-9,
Overseas Deployment Training.

FUNDING ISSUES/RESOLUTIONS:

    a. ARNG.

         (1) If the unit is not a JCS troop-listed unit participating in a JCS
Exercise, the ARNG funds the Operation and Maintenance in-country costs
directly related to ODT from the OMNG appropriation. The OMNG funds are
provided by the NGB through direct allocation to the OCONUS command.

        (2) Pay and allowances are funded with NGPA funds allocated to
the states concerned, whether or not the unit is a JCS troop-listed unit.

    b. USAR.

       (1) If the unit is not a JCS troop-listed unit participating in a JCS
Exercise, Operation and Maintenance in-country costs are funded by the
OMAR appropriation.

        (2) Pay and allowances are funded with RPA funds whether or not
the unit is a JCS troop-listed unit. RPA funds also pay for transportation
costs from the CONUS home station to the OCONUS training location.

    c. The purpose of the ODT described in the above sections is
considered for training of Reserve Component personnel only. If the
purpose of the ODT is primarily for the support of the Active Component or
to accomplish Active Component missions, then OMA funds the
subsistence, transportation to and from OCONUS duty locations, and

                                   25
in-country costs, not the Reserve Component appropriations.

   d. Only general guidance is contained in these paragraphs. For all
components, reference should be made to AR 350-9, AR 350-28, FORSCOM
Regulation 350-5, and other guidance.

UNRESOLVED: No unresolved issues.




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                 APPENDIX A: REFERENCES:



                                    26
1. DOD Instruction 4000.19, Inter-Service & Intra-Governmental Support,
9 Aug 95.

2. Draft, DOD Financial Management Regulation, Volume 11A,
Reimbursable Operations, Policy and Procedures, January 1996.

3. DFAS-IN Regulation 37-1, Finance and Accounting Policy
Implementation, 18 Sep 95.

4. DFAS-IN Manual 37-100-XX, The Army Management Structure.

5. Army Regulation 5-9, Inter-Service Support Installation Area
Coordination, 1 Mar 84.

6. Army Regulation 350-28, Army Exercises, 12 Apr 91.

7. Army Regulation 350-9, Overseas Deployment Training, 20 Oct 88.

8. Memorandum, HQDA, Subject: Army Reimbursable Policy,
19 May 95.

9. DA Pamphlet 710-2-1, Using Unit Supply System - Manual Procedures,
28 Feb 94.

10. FORSCOM Supplement to AR 5-9, Inter-service Support Installation
Area Coordination, 4 Jun 93.

11. FORSCOM/National Guard Bureau Regulation 350-2, Reserve
Component Training in America’s Army, 1 Mar 95.

12. FORSCOM Regulation 350-4, AC/RC Training Association Program,
Chapter 4, Funding, 1 Jan 95.

13. FORSCOM Regulation 350-5, Joint Training Exercises, 1 May 90.

14. USARC Regulation 37-1, USAR Financial Management and USAR
Support, 1 Oct 93.




                                  27
15. Office of the Assistant Secretary of the Army (Financial
Management & Comptroller) Reprograming Directive.

16. Memorandum, Department of the Army, Office of the General
Counsel, Subject: Use of Operation and Maintenance, Army (OMA)
Appropriation in Support of Overseas Deployment Training (ODT),
4 Jan 94.

17. Memorandum, Department of the Army, Office of the General
Counsel, Subject: Reimbursements Among the Three Army Military
Personnel Appropriations, 29 Apr 96.



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                    APPENDIX B: DEFINITIONS




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CROSS-COMPONENT FUNDING - Cross-Component funding occurs when
one component requests support from another component, and the
component providing the support has not programmed or budgeted for
that support. Until funds can be reprogrammed to the service supplier in
the out-years, the requesting component must provide funding for that
support.

SHOP SMART - Shop Smart is a Reserve Component Coordination
Council initiative which transfers Active Army installation base support
dollars to Reserve Component customers and permits them to select
support suppliers of their choice rather than continuing to rely upon the
installations. In Jun 95, the Vice Chief of Staff of the Army approved Shop
Smart for implementation in FY 97 and encouraged earlier implementation.
On 19 Jan 96, the FORSCOM Chief of Staff approved implementation for
the second half of FY 96 at three Regional Support Commands (94th, 96th,
and 124th) and the 65th ARCOM. Each installation has developed pricing
guidance for all Shop Smart categories (Visual Information Services,
Contracting, Environmental Compliance, ID Card Support, Physical
Security Inspections, Safety Services, and Supply). Implementation
procedures were finalized, meetings held at the sites in Feb 96 and funding
was provided to USARC on 1 Apr 96 for the four initial sites.

TRI-COMPONENT FUNDING - When multiple appropriations (OMA, OMAR,
and OMNG) fund a program that was previously funded by only one
appropriation. An example is the funding of the CONUSA Headquarters,
which is now Tri-Component funded, but was previously funded with
OMAR.

OFF-POST AREA SUPPORT - This was a FORSCOM initiative to move the
responsibility for off-post customer support from Active Component to
Reserve Component. USARC was tasked to come up with proposal to
transfer the support to the Reserve Component; details of this program
remain under study.

JOINT CHIEFS OF STAFF (JCS) EXERCISE PROGRAM - The JCS Exercise
Program is approved by the CJCS. It consists of exercises and training
activities planned and scheduled annually for a 5-year period. A program
exercise may be sponsored by the Joint Staff, a combatant command, a
Service, or a defense agency. Exercises may take the form mainly as

                                  29
Command Post Exercises (CPX), Field Training Exercises (FTX), or
Command Field Exercises (CFX). Training activities include simulations
and war games. The prescribing Army regulation for JCS Exercises is
AR 350-28, Army Exercises. FORSCOM Regulation 350-5, Joint Training
Exercises, also provides policy and guidance for FORSCOM units’
participation in JCS and other exercises.

OVERSEAS DEPLOYMENT TRAINING (ODT) - The term Overseas
Deployment Training refers to OCONUS training deployments by Reserve
Component units. The training is conducted with commands, host nations,
CONUS-based corps, and Third U.S. Army Outside the Continental United
States (OCONUS) and U.S. territories and possessions. The prescribing
regulation is AR 350-9, Overseas Deployment Training. The ODT excludes
exchanges of small units or personnel between the U.S. Army and armies
of allied and friendly nations, temporary cross-border movement of land
forces between CONUS and Canada, and other programs and training
specifically governed by ARs other than AR 350-9. Army Component
participation in ODT exercises directed, coordinated, or approved by the
JCS are governed IAW AR 350-28, Army Exercises, in addition to AR 350-9.

TOTAL ARMY SCHOOL SYSTEM (TASS) - TASS is the Army's vision of
fully accredited and integrated AC/USAR/ARNG schools that provide
standardized individual training and education for America's Army. Under
TASS, each RC school will be functionally aligned with a proponent service
school. When fully implemented, the goal of TASS is for proponent-
certified instructors in proponent-accredited schools to provide
standardized, quality instruction, using quality Total Army School System
courseware.

THE “ECONOMY ACT,” 31 USC 1535, AGENCY AGREEMENTS. The 31 USC
1535 states the following:

     “(a) The head of an agency or major organizational unit within an agency may
place an order with a major organizational unit within the same agency or another
agency for goods and services if -

           (1) amounts are available;

             (2) the head of the ordering agency or unit decides the order is in the best
interest of the United States Government;


                                         30
           (3) the agency or unit to fill the order is able to provide the ordered goods or
services; and

           (4) the head of the agency decides ordered goods or services cannot be
provided as conveniently or cheaply by a commercial enterprise.

    (b) Notwithstanding subsection (a)(3) of this section, the Secretary of Defense, the
Secretary of a military department of the Department of Defense, the Secretary of
Transportation in carrying out duties and powers related to aviation and the Coast
Guard, the Secretary of the Treasury, the Administrator of General Services, and the
Administrator of the Maritime Administration may place orders under this section for
goods and services that any agency or unit filling the order may be able to provide or
procure by contract.

     (c) Payment shall be made promptly by check on the written request of the agency
or unit filling the order. Payment may be made in advance or on estimated or actual
cost as determined by the agency or unit filling the order. A bill submitted or a request
for payment is not subject to audit or verification in advance of payment. Proper
adjustment of amounts paid in advance shall be made as agreed to by the heads of the
agencies or units on the basis of actual cost of goods or services provided.

     (d) An order placed or agreement made under this section obligates an
appropriation of the ordering agency or unit. The amount obligated is deobligated to
the extent that the agency or unit filling the order has not incurred obligations, before
the end of the period of availability of the appropriation, in-

           (1) providing goods or services; or

           (2) making an authorized contract with another person to provide the
requested goods or services.

     (e) This section does not-

           (1) authorize orders to be placed for convict labor; or

           (2) affect other laws about working funds.”

Per the Department of the Army Office of the General Counsel
memorandum referenced in paragraph 17 of Appendix A, “This memorandum
responds to your request for an opinion on the legality of allowing the three Army
military personnel appropriations to reimburse one another when cross-component
services are provided. For example, you asked how to pay for USAR members who
provide services to the National Guard to fulfill a National Guard need. The “Economy
Act,” 31 USC 1535, allows major organizational units within the same agency to place


                                         31
orders with, and pay one another for, services provided each other in accordance with
the statute. We are unaware of any additional statute that prohibits the National Guard
from paying the USAR for personnel services provided by the USAR from its personnel
appropriation....”




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